Punjab-Haryana High Court
Arvindera Electricals vs Greater Mohali Area Development ... on 20 November, 2025
Author: Jasgurpreet Singh Puri
Bench: Jasgurpreet Singh Puri
CR-8476-2025 -1-
120
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
***
CR-8476-2025
Date of Decision: 20.11.2025
Arvindera Electricals .... Petitioner
Versus
Greater Mohali Area Development Authority and others ..... Respondents
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present: Mr. Sourabh Goel, Advocate,
for the petitioner.
****
JASGURPREET SINGH PURI, J. (ORAL)
1. The present is a Civil Revision Petition filed under Article 227 of the Constitution of India seeking quashing of the order dated 14.11.2025 (Annexure P-20) passed by learned Sole Arbitrator vide which application of the respondent for filing counter-claim has been allowed.
2. Mr. Sourabh Goel, learned counsel for the petitioner while giving the facts of the case submitted that there was an Agreement between the petitioner and the respondent-Greater Mohali Area Development Authority (hereinafter referred to as 'GMADA') wherein there was an arbitration clause and in pursuance thereof a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration Act') was filed by the petitioner before this Court and a Co- ordinate Bench of this Court vide order dated 02.12.2024 (Annexure P-1) had allowed the aforesaid petition and a Sole Arbitrator was appointed. In pursuance thereof the arbitral proceedings commenced before learned Sole Arbitrator. The first date fixed before learned Sole Arbitrator was 1 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -2- 30.12.2024. Thereafter, on 24.07.2025, the statement of defence was also filed and on 12.09.2025 the petitioner filed rejoinder and issues were also framed. Thereafter, on 30.09.2025, an affidavit was filed by the petitioner/claimant since the case was fixed for evidence. On 27.10.2025, an application was filed by the respondents by stating that the counter-claim is pending before the Chief Administrator, GMADA and the aforesaid application for filing counter-claim by the respondents was allowed on 14.11.2025 by learned Sole Arbitrator. This order dated 14.11.2025 (Annexure P-20) vide which learned Sole Arbitrator has allowed the application for filing of the counter-claim by the respondents is under challenge in the present Civil Revision under Article 227 of the Constitution of India.
3. Learned counsel further submitted that the arbitral proceedings started on 30.12.2024 and as per the provisions of Section 23(4) of the Arbitration Act, the statement of claim and defence is to be filed within a period of six months from the date the Sole Arbitrator or the Arbitral Tribunal, as the case may be, receives notice, in writing of their appointment. He submitted that the aforesaid dates would show that after about almost 11 months from the date when the arbitral proceedings first commenced, 6 months have lapsed and therefore, learned Sole Arbitrator could not have allowed the filing of the counter-claim by the respondents by way of the impugned order (Annexure P-20) since it was in violation of the provisions of Section 23(4) of the Arbitration Act. He also submitted that allowing the aforesaid application of the respondents for filing the counter- claim by learned Sole Arbitrator, has caused prejudice to the petitioner since it was allowed to be filed beyond the limitation period of 6 months as 2 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -3- stipulated under Section 23(4) of the Arbitration Act.
4. While referring to the impugned order (Annexure P-20), he submitted that it was so observed by learned Sole Arbitrator that since the counter-claim is not a part of the original pleadings, the respondents are permitted to file their counter-claim and further submitted that the aforesaid finding of learned Sole Arbitrator is perverse because counter-claim is also a part of the original pleadings and also referred to Section 2(9) of the Arbitration Act in this regard. He also submitted that it was so observed by learned Sole Arbitrator that the respondent herein is a Corporate body and things do not move as fast as is expected and that also became a ground for allowing the application for filing the counter-claim by the respondent. He submitted that the aforesaid observation is also perverse in view of the fact that as per Section 18 of the Arbitration Act, equal treatment of parties has to be ensured and both the parties are to be given full opportunity to present their case.
5. Learned counsel also submitted that in case the counter-claim is permitted to be filed by way of the impugned order, then it will not only be prejudicial to the rights of the petitioner but will also be contrary to the provisions of Section 23(4) of the Arbitration Act and that is the reason as to why the petitioner has preferred to file the present Revision Petition challenging the aforesaid order passed by learned Sole Arbitrator even if it is procedural order by invoking the extraordinary jurisdiction of this Court under Article 227 of the Constitution of India. He further submitted that even if there is a non obstante clause under Section 5 of the Arbitration Act with regard to minimum judicial intervention by the judicial Courts but the extraordinary power under Articles 226 and 227 of the Constitution of India 3 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -4- remain untouched and the present petition is maintainable.
6. I have heard learned counsel for the petitioner.
7. Before proceeding further, the relevant statutory provisions of Sections 5, 23 and 25 of the Arbitration Act are required to be reproduced which are as under:-
5. Extent of judicial intervention.-Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
xx xx xx xx
23. Statements of claim and defence.-
(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.
1[(2A) The respondent, in support of his case, may also submit a counterclaim or plead a set-
off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set-off falls within the scope of the arbitration agreement.] 1. Ins. by Act 3 of 2016, s. 11 (w.e.f. 23-10-2015).
(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or 4 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -5- defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.
[(4) The statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing of their appointment.] xx xx xx xx
25. Default of a party.- Unless otherwise agreed by the parties, where, without showing sufficient cause,-
(a) the claimant fails to communicate his statement of claim in accordance with sub-
section (1) of section 23, the arbitral tribunal shall terminate the proceedings;
(b) the respondent fails to communicate his statement of defence in accordance with sub-
section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant 3[and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited].
(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it."
8. The basic issue involved in the present case is as to whether this Court would entertain a petition under Article 227 of the Constitution of India assailing a procedural order passed by learned Sole Arbitrator during 5 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -6- the pendency of the arbitral proceedings or not. The order under challenge herein is one vide which learned Sole Arbitrator has passed a procedural order permitting the respondents to file their counter-claim, although such order was passed after the expiry of six months from the date on which learned Sole Arbitrator had received notice of his appointment and even from the date of initiation of the arbitral proceedings.
9. Section 5 of the Arbitration Act provides for a non obstante clause giving the extent of judicial intervention and provides that notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. Therefore, the aforesaid statutory provisions contained under the Act which is a self contained code very clearly provides that a judicial authority shall not intervene unless it is so provided in this Part. Section 23 of the Arbitration Act provides for a 'Statement of claim and defence' and Section 23(4) of the Arbitration Act was inserted by way of an amendment in the year 2019 w.e.f. 30.08.2019 which provides for a time framework within which the statement of claim and defence under Section 23 of the Arbitration Act shall be completed i.e. within a period of six months from the date the Arbitrator or all the Arbitrators, as the case may be, received notice, in writing of their appointment. There is no dispute that from the date of initiation of the proceedings by learned Sole Arbitrator, six months had expired and thereafter, the respondents were permitted to file the counter-claim. Section 25 of the Arbitration Act provides for consequence of default of parties and Clause (b) of Section 25 of the Arbitration Act provides that if the respondent fails to communicate his statement of defence in accordance with 6 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -7- sub-section (1) of Section 23 of the Arbitration Act, the Arbitral Tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited.
10. The law with regard to the aforesaid issue of maintainability or entertainability of a petition under Article 226/227 of the Constitution of India may also be discussed at this stage. A Seven-Judge Constitution Bench of Hon'ble Supreme Court in "M/s SBP & Co. Vs. Patel Engineering Ltd. & Another" (2005) 8 SCC 618, while dealing with the nature of the orders passed under Section 11 of the Arbitration Act observed in Para Nos.45, 46 & 47(vi) with regard to the scope of judicial intervention. It was so observed that the Arbitral Tribunal is a creation of an Agreement between the parties, even though it is constituted on the basis of the order passed by the Chief Justice of the High Court, if any, occasion so arises but the parties submit themselves to the Arbitrator on the basis of agreement between the parties which is therefore contractual in nature. The rationale and the objective of minimizing the judicial intervention was also discussed by Hon'ble Supreme Court. In the concluding part of the judgment it was also observed that once the matter reaches Arbitral Tribunal or a Sole Arbitrator, then the High Court would not interfere with the order passed by the Arbitrator or Arbitral Tribunal during the course of arbitration proceedings and the parties would approach the Court only in terms of Section 34 of the Arbitration Act or Section 37 of the Arbitration Act. Para Nos.45, 46 & 47(vi) of the aforesaid judgment is reproduced as under:-
7 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -8- "45. It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. Section 37 makes certain orders of the Arbitral Tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating its grievances against the award including any in-between orders that might have been passed by the Arbitral Tribunal acting under Section 16 of the Act.
The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible.
46. The object of minimising judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, 8 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -9- of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.
47. We, therefore, sum up our conclusions as follows:
(i) to (v) xx xx xx xx
(vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act.
(vii) to (xii) xx xx xx xx"
11. In "M/s Deep Industries Limited Vs. Oil and Natural Gas Corporation Limited and another", 2020(15) SCC 706, order passed by learned Arbitral Tribunal under Section 17 of the Arbitration Act for staying the black-listing order was challenged before the learned City Civil Court which dismissed the appeal under Section 37 of the Act. This order under Section 37 of the Arbitration Act was challenged by way of filing a petition under Article 227 of the Constitution of India which was allowed by the High Court and the order of the City Civil Court was set aside. Thereafter, the Contractor assailed the same before Hon'ble Supreme Court in the aforesaid judgment i.e. M/s Deep Industries Limited's case (Supra). An argument was raised regarding the maintainability of filing the said petition under Article 227 of the Constitution of India by referring to the provisions of Section 5 of the Act as well as the judgment of Hon'ble Supreme Court in M/s SBP & Company Vs. Patel Engineering Ltd. & Another's case (Supra). Another argument was raised by the appellant of that case that it was not a case of lack of jurisdiction. Hon'ble Supreme Court held that against the order of Section 37 of the Arbitration Act, no petition under 9 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -10- Articles 226 & 227 of the Constitution of India can be filed. It was further held that although Article 227 of the Constitution of India remained untouched by the provisions of Section 5 of the Arbitration Act, but it is only when the orders that lack patent inherent jurisdiction that the provisions of Article 227 of the Constitution of India can be invoked. Further, it was also discussed that the legislative policy pertaining to the general revisional jurisdiction under Section 115 of the Code of Civil Procedure that a revision petition under Section 115 of the Code of Civil Procedure lies only against the final order and not against the interlocutory orders, is also relevant. In the present petition, the challenge is to an interlocutory order which is not a final order and is rather only a procedural order vide which the application of the respondent for filing the counter-claim has been allowed by learned Arbitrator. Para Nos.16, 17 & 24 are reproduced as under:-
"16. Most significant of all is the non-obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed (See Section 37(2) of the Act)
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot
10 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -11- forget that Article 227 is a constitutional provision which remains untouched by the non-obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction.
xx xx xx xx
24. Mr Rohatgi is also correct in pointing out that the legislative policy qua the general revisional jurisdiction that is contained by the amendments made to Section 115 CPC should also be kept in mind when the High Courts dispose of petitions filed under Article
227. The legislative policy is that no revision lies if an alternative remedy of appeal is available. Further, even when a revision does lie, it lies only against a final disposal of the entire matter and not against interlocutory orders. These amendments were considered in Tek Singh v. Shashi Verma 18 in which this Court adverted to these amendments and then stated: (SCC p. 681, paras 5-6) "5. ......A reading of this proviso will show that, after 1999, revision petitions filed under Section 115 CPC are not maintainable against interlocutory orders.
6. .....Even otherwise, it is well settled that the revisional jurisdiction under Section 115 CPC is to be exercised to correct jurisdictional errors only.
This is well settled. In DLF Housing & Construction Co. (P) Ltd. v. Sarup Singh 19 this 11 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -12- Court held: (SCC pp. 811-12, para 5) "5. ...The position thus seems to be firmly established that while exercising the jurisdiction under Section 115, it is not competent to the High Court to correct errors of fact however gross or even errors of law unless the said errors have relation to the jurisdiction of the Court to try the dispute itself. Clauses (a) and (b) of this section on their plain reading quite clearly do not cover the present case. It was not contended, as indeed it was not possible to contend, that the learned Additional District Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him, in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question. Clause (c) also does not seem to apply to the case in hand. The words "illegally" and "with material irregularity" as used in this clause do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may, in our view, relate either to breach of some provision of law or to material defects of procedure affecting the ultimate decision. and not to errors either of fact or of law, after the prescribed formalities have been complied with. The High Court does not seem to have adverted to the limitation imposed on its power under Section 115 of the Code. Merely because the High Court would have felt inclined, had it dealt with the matter initially, to come to a different conclusion on the question of continuing 12 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -13- stay of the reference proceedings pending decision of the appeal, could hardly justify interference on revision under Section 115 of the Code when there was no illegality or material irregularity committed by the learned Additional District Judge in his manner of dealing with this question. It seems to us that in this matter the High Court treated the revision virtually as if it was an appeal."
12. In "Bhaven Construction through Authorized Signatory Premji Bhai K. Shah Vs. Executive Engineers, Sardar Sarovar Narmada Nigam Limited and another" (2022) 1 SCC 75, an application was filed before learned Arbitrator under Section 16 of the Arbitration Act disputing the appointment of Sole Arbitrator. Against the aforesaid order in the application of Section 16 of the Arbitration Act, a petition under Article 226/227 of the Constitution of India was filed in the High Court and the learned Single Judge dismissed the same. However, the same was assailed by filing a Letter Patent Appeal, which was allowed and in this way an SLP was thereafter filed assailing the order passed in the LPA. It was held by Hon'ble Supreme Court in the aforesaid judgment that in exceptional rarity when a party is left remediless under a statute or there is a clear bad faith, then the provisions of Articles 226/227 of the Constitution of India can be resorted to. Para Nos.11, 12, 13, 14, 18, 19 & 20 are reproduced as under:-
"11. Having heard both the parties and perusing the material available on record, the question which needs to be answered is whether the arbitral process could be interfered under Articles 226/227 of the Constitution, and under what circumstance?
12. We need to note that the Arbitration Act is a code in itself. This phrase is not merely perfunctory, 13 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -14- but has definite legal consequences. One such consequence is spelled out under section 5 of the Arbitration Act, which reads as under
"5. Extent of judicial intervention.- Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."
(emphasis supplied) The non-obstante clause is provided to uphold the intention of the legislature as provided in the Preamble to adopt UNCITRAL Model Law and Rules, to reduce excessive judicial interference which is not contemplated under the Arbitration Act.
13. The Arbitration Act itself gives various procedures and forums to challenge the appointment of an arbitrator. The framework clearly portrays an intention to address most of the issues within the ambit of the Act itself, without there being scope for any extra statutory mechanism to provide just and fair solutions.
14. Any party can enter into an arbitration agreement for resolving any disputes capable of being arbitrable. Parties, while entering into such agreements, need to fulfil the basic ingredients provided under Section 7 of the Arbitration Act. Arbitration being a creature of contract, gives a flexible framework for the parties to agree for their own procedure with minimalistic stipulations under the Arbitration Act.
xx xx xx xx
18. In any case, the hierarchy in our legal framework, mandates that a legislative enactment cannot curtail a Constitutional right. In Nivedita Sharma v. Cellular Operators Association of India, 14 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -15- (2011) 14 SCC 337, this Court referred to several judgments and held:
"11. We have considered the respective arguments/submissions. There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation - L. Chandra Kumar v. Union of India, (1997) 3 SCC 261. However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation."
(emphasis supplied) It is therefore, prudent for a Judge to not exercise discretion to allow judicial 15 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -16- interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties.
This high standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient.
19. In this context we may observe Deep Industries Ltd. v. ONGC wherein interplay of Section 5 of the Arbitration Act and Article 227 of the Constitution was analysed as under: (SCC p. 714, paras 16-17) "16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In these 16 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -17- circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
(emphasis supplied)
20. In the instant case, Respondent 1 has not been able to show exceptional circumstance or "bad faith"
on the part of the appellant, to invoke the remedy under Article 227 of the Constitution. No doubt the ambit of Article 227 is broad and pervasive, however, the High Court should not have used its inherent power to interject the arbitral process at this stage. It is brought to our notice that subsequent to the impugned order of the sole arbitrator, a final award was rendered by him on merits, which is challenged by Respondent 1 in a separate Section 34 application, which is pending."
13. Recently, another Seven Judges Constitution Bench of Hon'ble Supreme Court in "Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, in Re:", (2024) 6 SCC 1 while largely dealing with provisions of Section 11 of the Arbitration Act also discussed the provisions of Section 5 of the Arbitration Act. It was observed that one of the objectives of the Arbitration Act was to minimize the supervisory role of Courts in the arbitration proceedings. The principle of minimum judicial interference was also discussed and it was so 17 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -18- observed that principle of judicial non-interference in the arbitration proceedings respects the autonomy of the parties to determine the arbitral procedures and this principle has also been incorporated in international instruments, including the New York Convention and the Model Law. It was observed by Hon'ble Supreme Court that one of the main objectives of the Arbitration Act is to minimize the supervisory role of Courts in the arbitral process and party autonomy and settlement of disputes by an arbitral tribunal are the hallmarks of arbitration law. Section 5 of the Arbitration Act gives effect to the true intention of the parties to have their disputes resolved through arbitration in a quick, efficient and effective manner by minimizing judicial interference in the arbitral proceedings and the Parliament has inserted Section 5 of the Arbitration Act to minimize the supervisory role of the Courts in the arbitral process to the bare minimum and only to the extent "so provided" under the Part-I of Arbitration Act. Para Nos.76, 81, 82 and 186 of the aforesaid judgment are reproduced as under:-
"76. The principle of judicial non-interference in arbitral proceedings is fundamental to both domestic as well as international commercial arbitration. The principle entails that the arbitral proceedings are carried out pursuant to the agreement of the parties or under the direction of the tribunal without unnecessary interference by the national courts.61 This principle serves to proscribe judicial interference in arbitral proceedings, which would undermine the objective of the parties in agreeing to arbitrate their disputes, their desire for less formal and more flexible procedures, and their desire for neutral and expert arbitral procedures.62 The principle of judicial non- interference in arbitral proceedings respects the 18 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -19- autonomy of the parties to determine the arbitral procedures. This principle has also been incorporated in international instruments, including the New York Convention and the Model Law.
xx xx xx xx
81. One of the main objectives of the Arbitration Act is to minimize the supervisory role of courts in the arbitral process. Party autonomy and settlement of disputes by an arbitral tribunal are the hallmarks of arbitration law. Section 5 gives effect to the true intention of the parties to have their disputes resolved through arbitration in a quick, efficient, and effective manner by minimizing judicial interference in the arbitral proceedings. Parliament enacted Section 5 to minimize the supervisory role of courts in the arbitral process to the bare minimum, and only to the extent "so provided" under the Part I of Arbitration. In doing so, the legislature did not altogether exclude the role of courts or judicial authorities in arbitral proceedings, but limited it to circumstances where the support of judicial authorities is required for the successful implementation and enforcement of the arbitral process. The Arbitration Act envisages the role of courts to "support arbitration process" by providing necessary aid and assistance when required by law in certain situations.
82. Section 5 begins with the expression "notwithstanding anything contained in any other law for the time being in force." The non-obstante clause is Parliament's addition to the Article 5 of the Model Law. It is of a wide amplitude and sets forth the legislative intent of limiting judicial intervention during the arbitral process. In the context of Section 5, this means that the provisions contained in Part I of 19 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -20- the Arbitration Act ought to be given full effect and operation irrespective of any other law for the time being in force. It is now an established proposition of law that the legislature uses non-obstante clauses to remove all obstructions which might arise out of the provisions of any other law, which stand in the way of the operation of the legislation which incorporates the non-obstante clause.
xx xx xx xx
186. Section 5 is effectively rendered otiose by the interpretation given to it in N.N. Global (2)°. The Court failed to provide a reason for holding that Section 5 of the Arbitration Act does not have the effect of excluding the operation of Sections 33 and 35 of the Stamp Act in proceedings under Section 11 of the Arbitration Act. The non obstante clause in Section 5 does precisely this. In addition to the effect of the non obstante clause, the Arbitration Act is a special law. We must also be cognizant of the fact that one of objectives of the Arbitration Act was to minimise the supervisory role of Courts in the arbitral process."
14. Now coming on the facts of the present case, the argument raised by learned counsel for the petitioner can be considered in the light of the aforesaid statutory provisions as well as the law laid down by Hon'ble Supreme Court. Although it was so argued by learned counsel for the petitioner that the impugned order suffers from perversity because it was so observed in the impugned order that the counter-claim is not a part of original pleadings, which otherwise is a claim under Section 2(9) of the Arbitration Act and the second perversity being that the respondent is a State Undertaking being contrary to the provision of Section 18 of the Arbitration 20 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -21- Act, the question would still remain as to whether the aforesaid ground would constitute perversity in the order passed by learned Sole Arbitrator during the arbitral proceedings and whether the same can become a ground for assailing the procedural order passed by learned Sole Arbitrator by filing a petition under Article 227 of the Constitution of India or not. It was not a case of learned counsel for the petitioner that learned Sole Arbitrator has acted in a mala fide manner but the only argument put forth by the learned counsel for the petitioner was that allowing of the aforesaid application was in violation of the provisions of Section 23 of the Arbitration Act. Hon'ble Supreme Court in the aforesaid judgments has given large impetus on the provisions of Section 5 of the Arbitration Act which provides for a non obstante clause. Therefore, it is very clear from the ratio of the aforesaid judgments in M/s SBP & Company Vs. Patel Engineering Ltd. & Another's case (Supra) and Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, in Re:
(Supra) with regard to the judicial intervention the provision of Section 5 of the Arbitration Act is of large importance.
15. Therefore, while applying the ratio of the aforesaid judgments of Hon'ble Supreme Court with regard to the minimum interference by the judicial Courts, this Court will consider as to whether it was a case where the order suffers from lack of patent inherent jurisdiction or it is a case of exceptional rarity or it is a case of bad faith. So far as the lack of patent inherent jurisdiction is concerned, the facts and circumstances of the present case clearly suggest that it is not a case of lack of patent inherent jurisdiction. There is no allegation with regard to the lack of inherent jurisdiction of the learned Sole Arbitrator. The only argument, which has 21 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -22- been raised, is pertaining to violation of Section 23(4) of the Arbitration Act. Rather the learned Sole Arbitrator was appointed on the basis of a petition filed by the petitioner itself under Section 11 of the Arbitration Act and learned Sole Arbitrator was appointed by a Co-ordinate Bench of this Court vide Annexure P-1 and thereafter, the petitioner also submitted to the jurisdiction of the said learned Sole Arbitrator and therefore, it is not a case of lack of patent inherent jurisdiction. So far as the issue of ground of bad faith is concerned, the same has neither been raised by the petitioner nor it is there in the facts and circumstances of the present case and therefore, it does not get substantiated under any circumstance. So far as the ground of exceptional rarity is concerned, the same is also not sustainable in view of the fact that there is nothing in the impugned order which can fall in the category of exceptional rarity. The impugned order is a procedural order vide which an application for filing of the counter-claim was allowed. It is also not a case where the petitioner is rendered remediless. Under the Scheme of the Arbitration Act when an award is passed, then the remedy is to file the objections under Section 34 of the Arbitration Act within the permissible parameters of the law and the grounds on the basis of which objections under Section 34 of the Act can be filed. It was observed by Hon'ble Supreme Court in M/s SBP & Company Vs. Patel Engineering Ltd. & Another's case (Supra) that once arbitration commences, parties must await the final award before seeking judicial remedies unless the Arbitration Act specifically provides for an appeal under Section 37. Resorting to Articles 226 or 227 against every interim order is impermissible and contrary to the legislative intent of minimizing court interference in arbitral processes. In the present case, the procedural order which is under 22 of 23 ::: Downloaded on - 06-12-2025 00:30:50 ::: CR-8476-2025 -23- challenge for allowing the counter-claim cannot be challenged by way of appeal under Section 37 of the Arbitration Act. However, the same can always be considered at the time of filing of objections under Section 34 of the Arbitration Act but strictly in accordance with law. In this way, the scope of supervisory jurisdiction against the procedural order passed by the Arbitral Tribunal being a matter of legal doctrine can be permitted only when there are exceptional circumstances. However, in the present case, the facts do not reveal any such exceptional circumstance which would justify exercise of supervisory jurisdiction. There is no prejudice touching the very foundation of the arbitral process and fairness between the parties. Although the proposition of law with regard to inherent revisional jurisdiction of the High Court under Article 227 of the Constitution of India is well settled that the same cannot be curtailed and the same is maintainable but the same is not entertainable in the facts and circumstances of the present case.
16. In view of the aforesaid facts and circumstances, this Court is of the considered view that no ground is made out for entertaining the present Revision Petition although the same may be maintainable under Article 227 of the Constitution of India. Consequently, the present Revision Petition is hereby dismissed.
20.11.2025 (JASGURPREET SINGH PURI)
Bhumika JUDGE
1. Whether speaking/reasoned: Yes/No
2. Whether reportable: Yes/No
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